U.S. fights to protect shore from massive oil spill

The U.S. Coast Guard cutter Southern Responder (R) is pictured during cleanup activity in the Gulf of Mexico, Louisiana, where oil leaking from the Deepwater Horizon wellhead continues to spread April 28, 2010.Sean Gardner

VENICE, La. (Reuters) - A huge spreading oil spill in the Gulf of Mexico washed up to coastal Louisiana wildlife and seafood areas on Friday and the U.S. government and military struggled to avert what could become one of the nation's worst ecological disasters.

With leading edges of the slick lapping up to outlying marshes and waterways on the fringes of the Mississippi Delta, the Coast Guard deployed protective equipment called booms along the coast in a bid to stop oil from soiling the shore.

Oil is pouring out of a blown-out undersea well off Louisiana at a rate of up to 5,000 barrels (210,000 gallons or 955,000 litres) a day. Forecasters say the spill could affect Mississippi, Alabama and northwest Florida in coming days.

Fitch's Energy Team estimated containment and clean-up costs could reach $2 billion to $3 billion "once the leak reaches land, and potentially more, the longer it takes to arrest the flow of oil into the Gulf," team senior director Jeffrey Woodruff said.

The Coast Guard said it had received reports from the public of oil coming ashore in Louisiana's Pass-a-Loutre wildlife reserve, but it was awaiting its own confirmation.

At President Barack Obama's urgent request, Department of Homeland Security Secretary Janet Napolitano, Interior Secretary Ken Salazar and Environmental Protection Agency Administrator Lisa Jackson were due to fly over the affected Gulf area on Friday to assess the situation.

The accident forced Obama to put a hold on politically sensitive plans to expand offshore U.S. oil drilling. He unveiled plans in March for a limited expansion, in part to try to win Republican support for climate change legislation.

The White House said no new drilling would be allowed until a review was conducted of the spill, which happened after an offshore rig exploded and sunk last week.

Obama has pledged to use every resource, including the U.S. military, to contain the 120-mile (193-km) wide slick, while making clear that London-based BP, the owner of the ruptured well, was responsible for the cost of the clean-up.

BP'S Chief Executive Tony Hayward said the company would clean up the oil spill and compensate those affected.

"We are taking full responsibility for the spill... We are going to be very, very aggressive in all of that," he told Reuters in an interview on Friday.

Shares of oil services companies tumbled on Friday in the aftermath of the spill. BP is down around 12 percent and Transocean down nearly 15 percent since the rig explosion on April 20.

AIR FORCE ON STANDBY

The spill has pounded BP's share price and those of other companies involved in the project.

As alarm over possible contamination spread along the U.S. Gulf Coast, the Louisiana Department of Health said residents in coastal cities, including New Orleans, were likely smelling the sulphurous odour from the spill.

The last flight by a Coast Guard plane on Thursday spotted the thin surface "rainbow sheen" of the slick just 10 metres (33 feet) from the Pass-a-Loutre reserve.

The Air Force said two C-130 aircraft were on standby in Mississippi to spray an oil inhibitor over the slick, if needed. "We're looking at all kinds of options in our capability portfolio," spokesman Maj. David Faggard said.

So far, efforts to stop the flow of oil have failed. If unchecked, it will take about 50 days for the leak to eclipse the 1989 Exxon Valdez spill in Alaska, the worst U.S. oil spill on record that sent 10.8 million gallons (49 million litres) of crude oil into Prince William Sound.

The Gulf Coast and its marshlands are home to hundreds of species of wildlife, including manatees, sea turtles, dolphins, porpoises, whales, otters, pelicans and other birds. The wetlands are also a stopover for millions of migrating birds.

The Gulf is also one of the world's most fertile seafood grounds, teeming with shrimp, oysters, mussels, crabs and fish. It supports a $1.8 billion industry second only to Alaska.

Louisiana Governor Bobby Jindal, whose state is still recovering from the ravages of Hurricane Katrina in 2005, declared a state of emergency and asked the Defence Department for funds to deploy up to 6,000 National Guard troops to help.

LAWSUITS UNDERWAY

Napolitano declared it "a spill of national significance," meaning federal resources could be used to fight it.

Shrimp fishermen in Louisiana have filed a class-action lawsuit against BP, Swiss-based rig company Transocean Ltd, Halliburton and Cameron, accusing them of negligence.

The Navy said it was supplying the Coast Guard with inflatable booms and seven skimming systems.

In Mobile, Alabama, U.S. Coast Guard Captain Steve Poulin, said authorities were preparing for "shoreline impact."

"We have a booming strategy for coastal Mississippi, Alabama and the Florida Panhandle," Poulin said.

BP and the Coast Guard have mounted what the company called the largest oil spill containment operation in history, involving dozens of ships and aircraft.

BP admitted struggling to control the spill, which is 5,000 feet (1,525 metres) under the sea off Louisiana's coast, and appealed for help. It has asked the Pentagon for access to military imaging technology and remotely operated vehicles to try to help it plug the ruptured well.

Eleven workers are missing and presumed dead after the rig exploded 11 days ago.

PAUSE IN DRILLING?

There are signs the spill may be worse than one in 1969 off Santa Barbara, California, which prompted a moratorium on oil and gas drilling off the Pacific and Atlantic coasts -- a ban Obama has said he wants to modify.

Bill Nelson, a Democratic senator from Florida, said he was introducing a bill to temporarily prohibit the administration from expanding offshore drilling, citing the risk of a potential "environmental and economic disaster."

Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak. BP is hoping to cover the well with a giant inverted funnel that would capture the oil at the sea floor and channel it directly to a tanker ship.

But that will take four weeks to put in place, by which stage over 150,000 barrels could have been spilled. If the funnel does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take 2-3 months.

Additional reporting by Tom Bergin in London, Phil Stewart in Washington, Joshua Schnyer and Rebekah Kebede in New York and Kelli Dugan in Mobile, Alabama; Writing by Christopher Wilson and Pascal Fletcher; Editing by Stacey Joyce